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Fourth District Affirms California Coastal Commission’s Authority to Impose Conditions on Coastal Development Permits Under Local Coastal Programs

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On September 19, 2019, the Fourth District Court of Appeal issued its decision in Lindstrom v. California Coastal Commission (2019) 40 Cal.App.5th 73, in which the appellate court partially reversed the trial court’s decision and held that the California Coastal Commission did not abuse its discretion with regard to three of four special conditions imposed on a coastal development permit for a residential project in the City of Encinitas. In upholding the three special conditions, two of which concerned setback requirements and the other prohibiting the construction of any shoreline protective devices, the court of appeal found the conditions to be consistent with the City’s local coastal program and within the Commission’s authority. The court ordered that the fourth condition be deleted or revised, however, as it found the Commission’s requirement that the home be removed if “any government agency” orders so “due to a natural hazard” to be both overly broad and unreasonable.

Background

In 2012, the Lindstroms applied for a coastal development permit with the City of Encinitas (City) to build a home atop a 70-foot high ocean-side bluff. To comply with the City’s Local Coastal Program (LCP), the permit application included a geotechnical report prepared by Geotechnical Exploration Inc. (GEI), an engineering firm hired by the Lindstroms. The LCP required the report to, among other things: (i) certify that the development would not endanger the bluff or require future bluff stabilization devices (i.e. coastal armoring or seawalls) based on a 1.5 safety factor over a 75-year time period, and (ii) calculate the minimum setback required for the development – a figure that could not be less than 40 feet. The GEI report concluded the proposed project could be built with a 40-foot setback without requiring bluff stabilizing measures in 75 years.

On May 2, 2013, the City’s planning commission approved the development permit with a condition requiring the Lindstroms to provide a letter stating the building could be removed in the event of endangerment. On May 28, 2013, GEI submitted a revised technical analysis which concluded the earlier report erred in calculating the development’s feasible setback. The new report stated the project would require a 72.25-foot setback, and proposed an alternate analysis based on the “natural angle of repose,” which would yield a 39.7-foot setback.

In June 2013, two Coastal Commission Commissioners appealed the City’s approval of the permit on grounds that it was inconsistent with the LCP. During the appeal process, the Lindstroms hired a second engineering firm, TerraCosta Consulting Group (TCG) and requested the Commission delay its decision. In October 2015, TCG prepared a new geotechnical report which concluded the slope would be safe with a 40-foot setback at a 1.29 safety level – a figure lower than the LCP-mandated 1.5 safety level.

The Coastal Commission heard the appeal in July 2016. As part of the appeal, a staff geologist concluded the proper setback should be 60 to 62 feet. The Commission agreed with the staff geologist, and approved the permit with four special conditions. The first condition (“Condition 1.a”) required construction to adhere to a 60- to 62-foot setback. The second condition (“Condition 3.a”) prohibited all use of coastal armoring devices. The third condition (“Condition 3.b”) required removal of the home in the event a government agency deemed occupancy unsafe due to natural hazards. The fourth condition (“Condition 3.c”) imposed mandatory remediation measures that the landowners would be required to take in the event hazardous bluff conditions threatened the structure.

In August 2016, the Lindstroms filed a petition for writ of mandate challenging the Commission’s conditions of approval. The trial court partially granted the petition and found in favor of the Lindstroms as to the first and second conditions (Conditions 1.a and 3.a) but found the Commission did not abuse its discretion in imposing the third and fourth conditions (Conditions 3.b and 3.c). The Commission and the Lindstroms appealed.

The Fourth District’s Decision

On appeal, the Fourth District Court of Appeal partially reversed the trial court’s holding, siding with the Commission on three of the four special conditions. Relying on the plain language in the City’s LCP and the Coastal Commission’s authority to impose reasonable conditions so long as they are consistent with the Coastal Act and the LCP, the court found the Commission did not abuse its discretion when it imposed Conditions 1.a, 3.a, and 3.c.  The court held that Condition 3.b, however, was improperly broad and not reasonably related to achieving the LCP’s purpose. That condition required that the Lindstroms remove their home in the event “any government agency” deemed it a “natural hazard.” That condition, according to the court, was poorly drafted and could have been read to require the Lindstroms to remove their home under unreasonable circumstances. The court therefore ordered the trial court enter a new judgment requiring the Coastal Commission to either delete or revise and clarify the condition.

 

Bridget McDonald

First District Court of Appeal Holds That “Demolition By Neglect” Does Not Constitute a Project Under CEQA

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The First District Court of Appeal held that a failure to act to preserve an historic property is not a
“project” under CEQA. (The Lake Norconian Club Foundation v. Department of Corrections and Rehabilitation (2019) 39 Cal.App.5th 1044.)

The Lake Norconian Club opened in 1929 as a “luxury resort catering to Hollywood stars and sports celebrities.” Since then, the building has operated as a military hospital, a drug rehabilitation facility, and administrative offices. The building, which sits adjacent to a state prison, has been vacant since 2002.

In 2012, the Legislature enacted SB 1022, which required the Department of Corrections and Rehabilitation to close the adjacent prison. The Department published a draft EIR for the closure of the prison, which included analysis of potential impacts on the former hotel as a result of the closure. The EIR concluded there was no funding for repair or rehabilitation of the building, and continued deterioration was expected. The Legislature subsequently rescinded closure of the prison. The Department certified a final EIR in 2013, which concluded that although the prison would not be closed, the Department would not be able to repair or maintain the former hotel.

The Lake Norconian Club Foundation filed a petition for writ of mandate in November 2014, alleging the Department abused its discretion by failing to act to protect the hotel. The Foundation alleged that the “department’s de facto issuance of ongoing demolition permits is a precommitment to a CEQA project that cannot lawfully be considered for approval or implementation without first preparing and certifying an EIR to consider impacts and alternatives.”

The trial court concluded that the Department’s failure to seek or allocate funding to preserve the hotel was a project within the meaning of CEQA, but rejected the Foundation’s assertion that the failure to engage in routine maintenance or mere inaction was a project. Regardless, the trial court held that the petition was untimely because the statute of limitations began to run when the Department certified the EIR for the closure of the prison complex in 2013.

The Court of Appeal upheld the trial court’s denial of the petition, but on different grounds. The court concluded that an agency’s failure to act is not itself an activity subject to CEQA, even if there are potential environmental consequences of the inaction. The continuing failure to make repairs, the court said, is not an activity under CEQA. The court noted several difficulties with determining when the statute of limitations would begin to run on an agency’s inaction. The court relied on similar circumstances arising in NEPA case law and explained that federal courts have repeatedly rejected similar arguments.

Finally, the court explained that it need not decide whether the analysis would be different where there is a mandatory duty on the part of the agency to act, because here, the Department had no such mandatory duty. For sure, the court said, absent a statutory duty, the Department’s failure to act cannot be deemed a project or challenged for noncompliance with CEQA.

Fourth District Court of Appeal Holds City’s Scenic View Ordinance Is Considered a Zoning Ordinance under Gov. Code Section 65901 and Therefore Subject to 90-Day Service Deadline for Petition in Section 65009

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In a unanimous opinion, the court in Weiss v. City of Del Mar (2019) 39 Cal.App. 5th 609, upheld the trial court and found that the 90-day service deadline in Government Code section 65009 applied to a planning commission action on a municipal scenic view ordinance. As a result, the court held that a petition for writ of mandate that was served on the City three months after the deadline was time barred.

Background

In August 2016, Petitioner Shirli Weiss submitted an application to the City of Del Mar under its Scenic View Ordinance requesting that Torrey Pacific Corporation, her neighboring property owner, trim its “‘wildly overgrown’” vegetation and trees to restore the ocean view from her property. The Planning Commission held a hearing on the application and, though divided, denied her request. The City Council issued a 2-2 split decision on her appeal in July 2017 which, under the City’s rules, reinstated the Planning Commission’s decision to deny her request.

Weiss filed a petition for writ of mandate against the City and Torrey Pacific in September 2017, but did not serve the City with the petition until December 2017. The respondents jointly moved to dismiss under the 90-day service requirement in Government Code section 65009, subdivision (c)(1)(E). The trial court granted the motion and found it was “‘undisputed’” that this statutory deadline was not met. Weiss appealed. In her appeal, she acknowledged that she served the City more than 90 days after the City Council denied her appeal but contended that section 65009’s deadline did not govern her action.

Time Barred by Section 65009

The Court of Appeal considered the “‘usual and ordinary meanings’” of the plain language in section 65009 within the context of the entire statute. Section 65009, subdivision c, plainly states that a “challenger must file and serve the public entity within 90 days of the challenged decision.” This statute of limitations, the court explained, applies to adoption or amendments of specific plans, general plans, zoning ordinances, development agreements, and regulations attached to specific plans, and all actions “‘done or made prior to any of these decisions.’” (Gov. Code, § 65009, subd. (c)(1).) The service requirement also applies to “‘any decision on the matters listed in Sections 65901 and 65903.’” (Id.) Sections 65901 and 65903 primarily apply to actions related to a zoning ordinance, such as a conditional use permit, variance, or “‘any other powers granted by local ordinance’” to the board of zoning adjustment or zoning administrator. (Id. at § 65901, subd. (a).) The court noted that section 65903 includes zoning board of appeals decisions.

Weiss argued that the City’s Scenic View Ordinance is not a zoning ordinance because it is not within the Municipal Code zoning rules and regulations. The court disagreed, and determined that the Planning Commission was “functionally acting in a zoning board capacity” when it ruled on Weiss’s application. The court explained that the substance of the Scenic View Ordinance required the City to “undertake[] zoning and planning responsibilities,” and therefore it did not matter whether the ordinance was within the City’s Municipal Code. The court cited to Save Lafayette Trees v. City of Lafayette (2019) 32 Cal.App.5th 148, where the court held that a tree ordinance was a zoning ordinance. The court noted that any decision made under the Scenic View Ordinance is “quintessentially a public entity decision involving…a land use and zoning determination.” But, the court said, even if it were not a zoning/land use determination, the “‘any other powers’” clause in section 65901 is broad and includes decisions on “a range of issues outside” the categories listed in sections 65901 and 65903.

Weiss also argued that sections 65009 and 65901 only apply to planning or zoning decisions on a project or development, but do not apply to enforcement of an ordinance. Weiss cited section 65009’s stated purpose—to provide “’certainty regarding decisions’” so that owners and governments can “‘proceed with projects.’” The court disagreed with this argument because, particularly where statutory language is “clear and unambiguous,” general statements of statutory purpose “do[] not override the substantive portion” of a statute.  Weiss also argued that the 90-day deadline in section 65009 had only ever been applied to projects or development and never in circumstances like those at issue here. The court agreed with Weiss, but explained that there was no authority stating that section 65009 is triggered only for challenges to projects or developments.

The court also rejected several final arguments from Weiss. First, she argued that the court’s decision to apply the 90-day service rule here would render the statute applicable to all of the Planning Commission’s actions. The court disagreed, pointing back to statutory language that limits 65009 to “zoning and similar land use determinations.” Next, Weiss claimed that the lack of urgency of the current dispute, unlike the expedience necessary for development, precluded applicability of section 65009. The court rejected this argument as an attempt to add language that does not exist in the statute. Additionally, the court explained that tree removal and maintenance issues do need to be resolved promptly. Lastly, Weiss argued that the Scenic View Ordinance specifically mentions Code of Civil Procedure section 1094.6, but does not mention section 65009, so that section must not apply. The court explained that Code of Civil Procedure section 1094.6 addresses filing deadlines but is silent on service of a petition. Both regulations, the court said, can therefore apply simultaneously.

Fourth District Affirms California Coastal Commission’s Authority to Impose Conditions on Coastal Development Permits Under Local Coastal Programs

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In Lindstrom v. California Coastal Commission (2019) 40 Cal.App.5th 73, the Fourth District Court of Appeal partially reversed the trial court, finding the California Coastal Commission did not abuse its discretion when it imposed special conditions on a coastal development permit for a residential project proposed on a vacant lot in the City of Encinitas. The court found three of four conditions were consistent with the City’s local coastal program and within the Commission’s authority. The court rejected one condition because it was overbroad, unreasonable, and did not achieve the Commission’s purpose.

Background

In 2012, the Lindstroms applied for a coastal development permit with the City of Encinitas (City) to build a home atop a 70-foot high ocean-side bluff. To comply with the City’s Local Coastal Program (LCP), the permit application included a geotechnical report prepared by Geotechnical Exploration Inc. (GEI), an engineering firm hired by the Lindstroms. The LCP required the report to, among other things: (i) certify that the development would not endanger the bluff or require future bluff stabilization devices (i.e. coastal armoring or seawalls) based on a 1.5 safety factor over a 75-year time period, and (ii) calculate the minimum setback required for the development – a figure that could not be less than 40 feet. The GEI report concluded the proposed project could be built with a 40-foot setback without requiring bluff stabilizing measures in 75 years.

On May 2, 2013, the City’s planning commission approved the development permit with a condition requiring the Lindstroms to provide a letter stating the building could be removed in the event of endangerment. On May 28, 2013, GEI submitted a revised technical analysis which concluded the earlier report erred in calculating the development’s feasible setback. The new report stated the project would require a 72.25-foot setback, and proposed an alternate analysis based on the “natural angle of repose,” which would yield a 39.7-foot setback.

In June 2013, two Coastal Commission Commissioners appealed the City’s approval of the permit on grounds that it was inconsistent with the LCP. During the appeal process, the Lindstroms hired a second engineering firm, TerraCosta Consulting Group (TCG) and requested the Commission delay its decision. In October 2015, TCG prepared a new geotechnical report which concluded the slope would be safe with a 40-foot setback at a 1.29 safety level – a figure lower than the LCP-mandated 1.5 safety level.

The Coastal Commission heard the appeal in July 2016. As part of the appeal, a staff geologist concluded the proper setback should be 60 to 62 feet. The Commission agreed with the staff geologist, and approved the permit with four conditions. The first condition (“Condition 1.a”) required construction to adhere to a 60- to 62-foot setback. The second condition (“Condition 3.a”) prohibited all use of coastal armoring devices. The third condition (“Condition 3.b”) required removal of the home in the event a government agency deemed occupancy unsafe due to natural hazards. The fourth condition (“Condition 3.c”) imposed mandatory remediation measures that the landowners would be required to take in the event hazardous bluff conditions threatened the structure.

In August 2016, the Lindstroms filed a petition for writ of mandate challenging the Commission’s conditions of approval. The trial court partially granted the petition and found in favor of the Lindstroms as to the first and second conditions (Conditions 1.a and 3.a) but found the Commission did not abuse its discretion in imposing the third and fourth conditions (Conditions 3.b and 3.c). The Commission and the Lindstroms appealed.

The Fourth District’s Decision

The Court of Appeal for the Fourth District partially reversed the trial court’s holding. Relying on the plain language in the City’s LCP and the Coastal Commission’s authority to impose reasonable conditions so long as they are consistent with the Coastal Act and the LCP, the court found the Commission did not abuse its discretion when it imposed Conditions 1.a, 3.a, and 3.c.  The court held the Condition 3.b, however, was improperly broad and not reasonably related to achieving the LCP’s purpose. That condition required that the Lindstroms remove their home in the event a government agency deemed it a natural hazard. That condition, the court said, was poorly drafted and could have been read to require the Lindstroms to remove their home under unreasonable circumstances. The court therefore issued a writ of mandate requiring the Coastal Commission to either delete or revise and clarify the condition.

 

Bridget McDonald

Second District Invalidates EIR’s Project Description For Failing to Provide Sufficient Detail and Certainty.

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In Stopthemillenniumhollywood.com et al. v. City of Los Angeles et al. (2019) 39 Cal.App.5th 1, the Second District Court of Appeal affirmed the trial court’s conclusion that an EIR for a mixed-use development project proposed by Millennium Hollywood, LLC (Millennium) in the City of Los Angeles (City) violated CEQA as a matter of law, because it failed to provide an accurate, stable, and finite project description.

In 2008, Millennium filed an application—which the Court of Appeal described as detailed—with the City proposing a mixed-use development project (2008 Proposal) on 4.47 acres in multiple parcels straddling two sides of Vine Street, between Yucca Street and Hollywood Boulevard, in the Hollywood Community Plan area of the City. The 2008 Proposal described a mixed-use development with 492 residential units, a 200-unit hotel, 100,000 square feet of office space, a 35,000-square-foot sports club and spa, 11,000 square feet of commercial uses, and 34,000 square feet of food and beverage uses. In total, proposed square footage was 1,163,079. Two historic buildings on site, the Capital Records Tower and Gogerty Building, would be preserved. The development would consist of two low-rise buildings, one on each side of Vine Street, with three towers intended to “frame” the Capital Records Tower. The 2008 Proposal would have required a zone change to allow the sports club, as well as a variance to allow the proposed density. After the City informed Millennium that a variance from the General Plan Floor Area Ratio (FAR) requirement would also be necessary, the project was put on hold.

In 2011, Millennium filed a new application with a new project description for the same site (2011 Project). Millennium still proposed a mixed-use development with residential, hotel, and retail uses totaling 1,166,970 square feet and a FAR of 6:1. Though the same mix of uses were proposed, the 2011 Project was “designed to create an impact ‘envelope’ within which a range of development scenarios can occur.” Thus, the specific shape, size, location, use, and number of buildings to be constructed on the site were not described, other than that the existing historic buildings would be preserved. Instead, Millennium sought to enter into a development agreement with the City that would establish the permitted developable floor area, land uses, design guidelines, and development standards for the site. Additionally, the 2011 Project included a land use equivalency program (LUEP) allowing the transfer of floor area between parcels on the site. The EIR analyzed the maximum level of impacts that could occur under the development agreement, regardless of which of the several development scenarios was actually constructed in the future.

Commenters on the Draft EIR complained that the imprecise project description hindered meaningful public participation. Nevertheless, the City approved the development agreement, certified the EIR, adopted mitigation for the analyzed maximum level of impacts and adopted a statement of overriding considerations. Petitioners, Stopthemillenniumhollywood.com, Communities United for Reasonable Development, and George Abrahams (collectively, Petitioners) petitioned the Los Angeles Superior Court for a writ of mandate setting aside project approval and certification of the EIR. Petitioners alleged three causes of action relating to violations of CEQA. First, they alleged that the EIR failed to include an accurate, stable, and finite project description. The second cause of action asserted that the City abused its discretion by failing to study traffic impacts to the 101 freeway despite Caltran’s direction that the City do so. The third cause of action alleged that the City failed to consult with the California Geological Survey regarding potential seismic hazards on the site. The trial court granted the petition as to the first and second causes of action, but not the third.

On the first cause of action, the trial court found that the project description was not stable or finite, and that the use of the word “or” in a condition of approval allowed Millennium, or future developers, to choose any permitted use listed for the C2 zone in the LAMC for future development, not just the list of proposed uses in the development agreement. The trial court reasoned that, though there may be circumstances where a project description may disclose only the physical parameters and maximum potential environmental impacts, no such circumstances were present here. The trial court distinguished Citizens for a Sustainable Treasure Island v. City and County of San Francisco (2014) 227 Cal.App.4th 1036 (Treasure Island), on the grounds that that case dealt with a site contaminated by hazardous materials, and it was unknown when cleanup of the site would be completed. The trial court noted that the development in Treasure Island included both fixed elements (including the street grid) and conceptual elements that would “likely” be subject to supplemental CEQA review. The trial court concluded that neither element was present here.

The trial court also found that, by including an ambiguous project description, the EIR impermissibly deferred part of the analysis of environmental impacts. Specifically, the trial court found that, because no specific “concept” was analyzed, the EIR did not explain how exceedance of the maximum impacts would be avoided when the project was actually designed and built; nor was additional CEQA review contemplated by either the EIR or the development agreement. The trial court determined that, without knowing the “bona fide subject” of the EIR, it would be impossible for the public and decisionmakers to accurately weigh the “environmental price tag” of the proposal and decide if the benefits outweigh that price.

The City and Millennium appealed the trial court’s decision as to the first and second cause of action, while Petitioners appealed the decision on the third cause of action. The Court of appeal, after ruling on the first cause of action, determined that it need not reach the other issues raised by the parties.

In affirming the trial court, the Court of Appeal looked to County of Inyo v. City of Los Angeles (1977) 71 Cal.App.3d 185 (County of Inyo), and Washoe Meadows Community v. Department of Parks and Recreation (2017) 17 Cal.App.5th 277 (Washoe Meadows). The Court cited County of Inyo for the proposition that, even where an inaccurate project description does not render invalid the analysis of environmental effects, it may nevertheless violate CEQA by interfering with “intelligent public participation.” The Court found further support for this position in Washoe Meadows, where the First District held that a failure to select or identify a specific project in the Draft EIR interfered with the public’s right to participate in CEQA review.

In the case before it, the Court found that the project description “fail[ed] to describe the siting, size, mass, or appearance of any building proposed to be built at the project site” and that the proposed development regulations imposed only vague and ambiguous limits on future construction choices. The Court held that, even if the analysis of maximum impacts were adequate—despite the project description, “CEQA’s purposes go beyond an evaluation of theoretical environmental impacts.” The Court determined that the project description violated CEQA as a matter of law.

In reaching its decision, the Court distinguished South of Market Community Action Network v. City and County of San Francisco (2019) 33 Cal.App.5th 321 (South of Market), on two grounds. First, the Court found that the only “uncertainty” at issue in South of Market was that the project description presented a choice of either a predominately office use or a predominately residential use, but the EIR did not select one or the other. Second, the Court found that the EIR in South of Market “included ‘site plans, illustrative massing, building elevations, cross-sections and representative floor plans for both options.”’ Because the EIR before it did not include these “technical characteristics” of the project, the Court concluded that it failed to comply with CEQA’s mandates. The Court also largely agreed with basis for the trial court’s distinguishing of Treasure Island, supra, 227 Cal.App.4th 1036, finding that no unusual circumstances were present in this case, and that future planning and development of the project would not be subject to additional environmental review. Lastly, the Court found the violation to be prejudicial because it interfered with public participation.

As stated above, the Court determined that it need not address the other issues raised by the parties. The Court dismissed an argument that Public Resources Code section 21168.9 required them to rule on each issue raised in a CEQA appeal. The Court found that section applied only to the trial court’s order on remand, which is to address only those mandates from the Court of Appeal that are necessary to comply with CEQA. The Court found that the trial court’s judgment was correct on at least one ground, so it was affirmed.

Nathan George

California Supreme Court Holds Adoption of Zoning Ordinance for Medical Marijuana Dispensaries is a “Project” Subject to CEQA

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On August 19, 2019, the California Supreme Court issued its decision in Union of Medical Marijuana Patients, Inc. v. City of San Diego (2019) 7 Cal.5th 1171, in which the Court unanimously held that the City of San Diego’s adoption of a zoning ordinance for medical marijuana dispensaries is a “project” subject to CEQA. Although the Court agreed with the Fourth District Court of Appeal and the city in rejecting the petitioner’s argument that the adoption of a zoning ordinance is always a project, as a matter of law, under Public Resources Code section 21080, the Court reasoned that the adoption of the ordinance at issue was nonetheless the type of activity which, by its general nature, “is capable of causing a direct or reasonably foreseeable indirect physical change in the environment.” As such, the Court held, it is a “project” subject to CEQA.

Background

In 2014, the city adopted a zoning ordinance authorizing the establishment of medical marijuana dispensaries in the city and imposing various restrictions on their location and operation. The ordinance specified zones where dispensaries are permitted, included a cap on the number of dispensaries in any one district, restricted their proximity to sensitive uses, and imposed basic conditions on lighting, security, and hours of operation. At the time the ordinance was proposed, the city determined that the adoption of the ordinance did not constitute a “project” for purposes of CEQA. The city, therefore, did not conduct any environmental review prior to adopting the ordinance.

Following the city’s adoption of the ordinance, petitioner filed a petition for writ of mandate challenging the city’s decision not to conduct CEQA review. In the trial court, petitioner argued that the adoption of the ordinance should have been found to be a project under Public Resources Code section 21065, which defines a “project” as any activity undertaken or funded by, or requiring the approval of, a public agency that “may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.” According to the petitioner, the ordinance had the potential, among other effects, to cause increased vehicle traffic across the city, increase user cultivation, and concentrate dispensary development-related impacts in certain areas. The trial court rejected petitioner’s arguments and upheld the city’s decision, finding the petitioner’s claims were unsupported by evidence in the record.

On appeal, petitioner reiterated its argument regarding the potential to cause physical changes in the environment, and further argued that the adoption of the zoning ordinance was a project as a matter of law under Public Resources Code section 21080. Section 21080 states that CEQA “shall apply to discretionary projects proposed to be carried out or approved by public agencies, including, but not limited to, the enactment and amendment of zoning ordinances …” Pointing to this language, petitioner argued that the enactment of a zoning ordinance is automatically a project under CEQA, regardless of the potential for environmental change. Petitioner’s argument was based in part on the Third District’s decision in Rominger v. County of Colusa (2014) 229 Cal.App.4th 690, where the court held that the county’s approval of a tentative map—another activity expressly listed in section 21080—was a project as a matter of law.

Notwithstanding Rominger, the Fourth District Court of Appeal rejected both of petitioner’s arguments, holding that the enactment of a zoning ordinance is subject to the same “project” test as any other activity under Public Resources Code section 21065. Further, the court found no error in the city’s conclusion that the zoning ordinance was not a project because it lacked the potential to cause a physical change in the environment. According to the Fourth District, the potential environmental effects raised by the petitioner were unsupported by the record and too speculative to establish a potential to physically change the environment.

The Supreme Court’s Review

Seeking to resolve the split between the Fourth District’s decision and Rominger, the Supreme Court granted review to address two issues: (1) whether, under Public Resources Code section 21080, a public agency’s enactment of a zoning ordinance is always project under CEQA, as a matter of law; and (2) whether the enactment of the city’s zoning ordinance was a “project” under section 21065.

The Court began its analysis by placing the dispute into context. As the Court explained, CEQA proceeds by way of a three-step process or “decision tree.” First, the lead agency must determine whether the proposed activity is a “project” subject to CEQA at all. Second, assuming CEQA applies, the agency must determine whether the project qualifies for one or more of the many CEQA exemptions. Third, assuming no exemptions apply, the agency must undertake environmental review, namely, preparation of an initial study and a negative declaration, mitigated negative declaration, or an environmental impact report. At issue here was the very first step of the process—the city’s determination that the adoption of the zoning ordinance was not a “project” subject to CEQA at all.

Turning to the first issue, the Court agreed with the Fourth District that Public Resources Code section 21080 does not dictate the result as a matter of law. Engaging in a statutory interpretation analysis, the Court reasoned that while section 21080 is ambiguous when read in isolation, the Legislature’s use of the statutorily defined term “project” in that section must be read to incorporate the definition of “project” in section 21065. Accordingly, the language in PRC section 21080 that CEQA “shall apply to discretionary projects” must be read to provide that CEQA applies to activities that are both (1) discretionary; and (2) meet the definition of a “project” in section 20165. According to the Court, the specific activities listed in section 21080 are merely generic examples of the type of activities approved or carried out by public agencies to which CEQA could apply, however, the mere listing of an activity in that section does not supplant the potential “physical change” analysis required under section 21065.

The Court found further support for its reading of section 21080 in the definition of the term “project” in CEQA Guidelines section 15378, which makes clear the enactment of a zoning ordinance is merely an example of an activity undertaken by public agencies; policy considerations against subjecting activities to CEQA where there is no potential to effect the environment; and the legislative history of section 21065 revealing the Legislature’s intent to narrow CEQA’s application to activities posing a possibility of an environmental effect.

The Court also refuted the notion that its reading of the statute renders section 21080 mere surplusage, noting that the significance of section 21080 is that it states, in the affirmative, the additional requirement that projects must be “discretionary” for CEQA to apply.

After concluding that the adoption of a zoning ordinance is not a project as a matter of law, the Court turned to whether the adoption of the dispensary ordinance in this case was nonetheless a project subject to CEQA under Public Resources Code section 21065. The Court disagreed with the appellate court and answered the question in the affirmative.

As the Court explained, the governing decision for the “project” inquiry is Muzzy Ranch Co. v. Solano County Airport Land Use Commission (2007) 41 Cal.4th 372. In that case, the Court observed, “Whether an activity constitutes a project subject to CEQA is a categorical question respecting whether the activity is of a general kind with which CEQA is concerned, without regard to whether the activity will actually have environmental impact.” In other words, an agency’s task in determining whether a proposed activity is a project is to determine if, by its general nature, the activity is capable of a causing physical change in the environment, without regard to whether actual effects will occur under the circumstances.

Applying Muzzy Ranch, the Court held that the city erred in determining that the adoption of the zoning ordinance was not a project subject to CEQA. The Court noted that the ordinance would permit the establishment of a sizable number of new businesses, which could foreseeably result in new construction. Furthermore, the ordinance could cause changes in vehicle traffic patterns as a result of customers, employees, and suppliers. Finally, the Court explained, the necessary casual connection between the ordinance and these effects was satisfied because the adoption of the ordinance was “an essential step culminating in action . . . which may affect the environment.” For these reasons, the Court held, the adoption of the zoning ordinance was a “project” subject to CEQA.

Collin McCarthy

In First Opinion Addressing a Sustainable Communities Environmental Assessment, the Third District Upholds the City of Sacramento’s Approval of an Infill Project

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In Sacramentans for Fair Planning v. City of Sacramento (2019) 37 Cal.App.5th 698, the Third District Court of Appeal upheld the City of Sacramento’s reliance on a Sustainable Communities Environmental Assessment (SCEA), a relatively new method for conducting streamlined CEQA review for certain projects that help the state meet its greenhouse gas (GHG) reduction targets. (See Pub. Resources Code, § 21155.2, subd. (b).) The decision is the first published opinion addressing the propriety of an SCEA. The court held that the transit priority project at issue was consistent with the region’s sustainable communities strategy and therefore the City’s reliance on the SCEA complied with CEQA.

The court also upheld the City’s reliance on a unique provision in its general plan that allows the City to approve projects that are inconsistent with the City height and density limits if the projects offer significant community benefits.

Background

The Sustainable Communities and Climate Protection Act (SB 375) was created to integrate transportation and land use planning to reduce GHG emissions. SB 375 directed the California Air Resources Board to develop regional targets for automobiles and light trucks to reduce emissions. In turn, federally designated metropolitan planning organizations (MPOs) must now include a “sustainable communities strategy” (SCS) in their regional transportation plans/ metropolitan transportation plan (MTP). (Gov. Code, § 65080, subd. (b)(2)(B).) MTP/SCSs direct the location and intensity of future land use developments on a regional scale to reduce vehicle emissions. The Sacramento Area Council of Governments (SACOG) is the MPO for the Sacramento area. SACOG adopted an MTP/SCS for the region in 2012 and certified an EIR for the MTP/SCS at that time.

Under SB 375, the mandated reductions may be achieved through a variety of methods, including “smart growth planning.” The Legislature determined that one type of development that can help reduce vehicular GHG emissions is a “transit priority project.” This type of project contains at least 50% residential use, has a minimum density of 20 units per acre, and is located within one-half mile of a major transit stop.

To boost development of transit priority projects, SB 375 allows for streamlined CEQA review through an SCEA if the project: (1) is consistent with the general use designation, density, building intensity, and applicable policies specified for the project area’ in the strategy; and (2) incorporates all feasible mitigation measures, performance standards, and criteria set forth in the prior applicable environmental impact reports’ and which were adopted as findings. (Pub. Resources Code, §§ 21155, subd. (a), 21155.2, subds. (a), (b).)

The “Yamanee” project at issue in Sacramentans is a proposed 15-story multi-use building made up of one floor of commercial space, three levels of parking, residential condominiums on 10 floors, and one floor of residential amenities. The building is proposed to be located near public transit in Sacramento’s growing “Midtown” area, adjacent to the City’s downtown. The project is located in the MTP/SCS’s central city subarea of a “Center and Corridor Community.” Under the MTP/SCS, Center and Corridor Communities are typically higher density and more mixed than surrounding land uses. SAGOG organized the MTP/SCS in such a way that policies for reducing GHG emissions were embedded in the MTP/SCS’s growth forecast assumptions. Thus, projects that are consistent with the MTP/SCS’s growth forecasts are automatically consistent with the MTP/SCS’s emission-reduction policies.

The City determined that the Yamanee project qualified as a transit priority project and that the project was consistent with the general land use designation, density, building intensity, and applicable policies in the MTP/SCS. Therefore, the City used an SCEA to review the project under CEQA. The SCEA explained that, as a transit priority project, the Yamanee project would increase housing options near high quality transit and reduce vehicle miles traveled. It also explained that the project is consistent with the MTP/SCS’s forecast of low to high-density residential and mixed uses in the center subarea of the Center and Corridor Community.

The City Council upheld the City planning and design commission’s approval of the project and rejected the petitioner’s appeal of that decision. The petitioner sought a writ of mandate in the superior court, claiming that the City’s approval of the project violated CEQA and the planning and zoning law. The superior court denied the petition and the Court of Appeal affirmed.

CEQA

The Court of Appeal rejected the petitioner’s claim that the City erred by relying on SACOG’s MTP/SCS to justify using an SCEA. The petitioner argued that because the MTP/SCS lacked specific density and building intensity standards, the City could not rely on it as a basis for an SCEA. Further, claimed the petitioner, the MTP/SCS undermines the City’s general plan because it treats the City’s center as “higher density,” whereas the general plan sets forth a more nuanced approach under which building intensities and densities increase the closer a development gets to the downtown. These arguments, concluded the court, were premised on a misunderstanding of the MTP/SCS’s role. An MTP/SCS does not regulate land use. The purpose of an MTP/SCS is to establish a regional development pattern, not site-specific zoning. SB 375 authorized the City to review the project in an SCEA if the project was consistent with the regional strategy. Because it was, the city was allowed to rely on an SCEA. Although, as the petitioner contended, reliance on an SCEA could mean that certain projects receive less environmental review than traditionally required under CEQA, the court advised that the petitioner should take this concern to the Legislature, not the courts.

The court also rejected the petitioner’s claim that the City erred by relying on previous EIRs for the general plan and MTP/SCS to avoid analyzing the project’s cumulative impacts. In particular, the petitioner claimed that streamlined review was inappropriate in this case because no prior environmental analysis had considered the cumulative impacts of high-rise development in Sacramento’s midtown. The court explained that CEQA required the City to prepare an initial study (IS) before drafting the SCEA. The City’s IS for the project concluded that cumulative effects had, in fact, been adequately addressed and mitigated, and therefore did not need to be analyzed further in the SCEA. Additionally, the project included all applicable mitigation measures recommended in the prior EIRs. The petitioner failed to show that the City’s analysis was not factually supported. Accordingly, the City did not err by relying on prior cumulative impact analyses.

Planning and Zoning Law

The development proposed by the project is denser and more intense than what would ordinarily be allowed under the City’s general plan and zoning code. The City approved the project, however, under a provision in its general plan that allows the City to approve more intensive development when a project’s “significant community benefits” outweigh strict adherence to the density and intensity requirements. The City determined that the project would have several significant community benefits, including helping the City to achieve its goal of building 10,000 new residential units in the central city by 2025, and reducing dependency on personal vehicles. These, and other benefits, outweighed strict adherence to the City’s density and intensity limits.

The petitioner argued that the City’s decision to allow the Project to exceed the general plan and zoning code’s intensity and density standards constituted unlawful “spot zoning.” The court explained that spot zoning occurs where a small parcel is restricted and given fewer rights than the surrounding property (e.g., when a lot is restricted to residential uses even though it is surrounded by exclusively commercial uses). This case, explained the court, is not a spot-zoning case in that the property was not given lesser development rights than its neighboring parcels. The petitioner argued that the neighboring parcels had, in fact, been given lesser development rights through the City’s approval of the project, but there was no evidence in the record that any neighboring owner sought and was denied permission to develop at a greater intensity or that the City would arbitrarily refuse to consider an application for such development.

The petitioner also argued that the phrase “significant community benefit” as used in the City’s general plan was unconstitutionally vague. The court disagreed, explaining that zoning standards in California are required to be made “‘in accord with the general health, safety, and welfare standard,’” and that the phrase “significant community benefit” was no less vague than the phrase “general welfare.” Additionally, held the court, the phrase “significant community benefit” provides sufficient direction to implement the policy in accordance with the general plan.

The court also held that the City had articulated a rational basis for the policy allowing the City to waive the density and intensity standards for projects that provide significant community benefits, which is all that the Constitution required.

Conclusion

In this case, the City of Sacramento successfully employed CEQA’s streamlined provisions for transit priority projects to expedite and simplify its environmental review of an infill project that will help the City meet its aggressive new housing goal and reduce greenhouse gas emissions. The City’s general plan allowed the City to approve the project because the project would provide significant public benefits, even though the project is inconsistent with the general plan and zoning code’s density and intensity standards. As California continues to combat the dual threats of a housing shortage and climate change, cities and counties are likely to increasingly rely on streamlined approaches to the approval process for mixed-use projects near public transit.

The Fourth District Court of Appeal Rejects Community Service District’s Attempt to Exempt Itself from City’s Zoning Ordinance

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In City of Hesperia v. Lake Arrowhead Community Services District (2019) 37 Cal.App.5th 734, the Fourth District Court of Appeal upheld the trial court’s conclusion that the Lake Arrowhead Community Services District’s (“District”) Solar Project is not exempt from – and must comply with – the City of Hesperia’s (“City”) zoning ordinances.

The District, which is only authorized to provide water and wastewater treatment services within its boundaries, planned to develop a solar energy project on property zoned as “Rural Residential” that it owns within the City. The City’s Municipal Code dictates that solar farms are only permitted in nonresidential and nonagricultural areas with the approval of a conditional use permit by the City’s planning commission.

Pursuant to CEQA, the District prepared and circulated an Initial Study and Mitigated Negative Declaration for comments on the Solar Project in May 2015. The City commented that the Project required a general plan amendment and zone change to be filed with the City and that the Project would violate the City’s Municipal Code, which prohibits solar farms within 660 feet of agriculturally designated property. Government Code section 53091 requires that local agencies comply with the building and zoning ordinances of the county or city in which they are located.

On December 15, 2015, the District’s Board adopted a resolution that purported to render the City’s zoning ordinances inapplicable to the Solar Project. In passing this resolution, the District relied on Government Code section 53091, subdivision (e), an absolute zoning exemption for electrical energy generation facilities, and Government Code section 53096, a qualified zoning exemption for projects with no feasible alternative location.

The City subsequently filed a lawsuit contending that the Solar Project is beyond the scope of the District’s authority and is subject to the City’s zoning ordinances. The court agreed with the City and held that the Project was not exempt under either of these sections.

Section 53091, subdivision (e)

Section 53091, subdivision (e), of the Government Code states that the “[z]oning ordinances of a county or city shall not apply to the location or construction of facilities . . . for the production or generation of electrical energy.” The court explained that while the section 53091, subdivision (e), exemption does apply to the Project, the same section also includes an exception to the exemption that applies to the Project and negates the exemption. The exception to the exemption provides that “[z]oning ordinances of a county or city shall apply to the location or construction of facilities for storage or transmission of electrical energy by a local agency, if the zoning ordinances make provision for those facilities.” Here, the court agreed with the City that the Solar Project involves the transmission of electrical energy and is therefore not exempt from the City’s zoning ordinances under section 53091, subdivision (e).

In reaching this conclusion, the court was influenced by the fact that the District had earlier entered into an agreement with Southern California Edison Company, which stated that the District “will export electrical energy to the grid” and be responsible for “delivery of electricity.” The dictionary definitions for “export” and “delivery” are consistent with the “transmit” terminology in the exception. The court rejected the District’s argument that using the plain meaning of the word “transmission” would prohibit any electrical energy facility from qualifying for a zoning exemption because section 53096, subdivision (a) (discussed below), provides a qualified exemption for energy facilities under certain conditions.

Section 53096, subdivision (a)

Government Code section 53096, subdivision (a), provides a qualified exemption from zoning ordinances for facilities related to the transmission of electrical energy upon a four-fifths vote by the agency’s board that there is no feasible alternative to the proposed use. Here, the District’s Board determined that it was not feasible to install the Solar Project at any alternative locations, as doing so “would result in a significant cost increase, measurable power loss, and project delay.”

The court concluded that while the Board followed the proper procedural requirements of the qualified exemption, the administrative record did not contain substantial evidence to support the District’s findings. The City successfully demonstrated to the court that the administrative record did not include evidence of “economic, environmental, social, or technological factors associated with an alternative location.” The court was persuaded by the fact that the Board failed to consider any alternative location for the Solar Project in reaching its discretionary determination under section 53096, subdivision (a).

In determining the definition of “feasible” for purposes of this exemption, the court relied on case law related to CEQA’s definition for feasible alternatives and mitigation measures. The court cited Citizens of Goleta Valley v. Board of Supervisors (1988) 197 Cal.App.3d 1167, which dictates that the consideration of feasible alternatives is governed by the “rule of reason” – where alternatives must be analyzed if doing so is “necessary to permit a reasoned choice.” Here, the court concluded that the “any ‘rule of reason’ requires consideration of alternatives.” (Italics original.) The District therefore needed to provide evidence that it considered an alternative location and “economic, environmental, social, and technological factors” related to the alternative, but it merely provided evidence that the site was a “good location” for the Project. Thus, the court held that the section 53096, subdivision (a), exemption also does not apply to the Solar Project.

Second District Upholds City of Los Angeles’ Determination That EIR Not Required to Assess Population or Housing Impacts for Hotel Project on Site of Vacant Former Apartment Building

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In an opinion certified for partial publication on July 22, 2019, the Second District Court of Appeal affirmed the trial court’s decision and held that the City of Los Angeles was not required to prepare an EIR to assess housing-related impacts for a boutique hotel project on the site of a now-vacant former apartment building. Hollywoodians Encouraging Rental Opportunities (HERO) v. City of Los Angeles (B285552; filed 6/28/19, ordered published 7/22/19) ___ Cal.App.5th___ (“HERO”).

The project at issue in HERO is a proposed 24-room boutique hotel in the Hollywood area of Los Angeles. Prior to 2013, the project site was occupied by an 18-unit apartment building that was subject to the city’s Rent Stabilization Ordinance. In 2013, the owner filed a notice of intent to withdraw all 18 units from the rental housing market pursuant to the Ellis Act in order to pursue construction of a condominium project on the site. While the condo project was later abandoned due to a lack of financing, the building never returned to the rental market and remained uninhabited for nearly two years.

In July 2015, the owner of the property submitted a new application to the city, this time seeking to convert the site into a 24-room hotel. The city prepared an initial study for the hotel project. The initial study concluded that, with mitigation, the project would have no significant environmental impacts. With respect to population and housing impacts specifically, the initial study concluded that the project would not displace housing units or residents because the apartments had been withdrawn from the rental market and the building was uninhabited. Accordingly, the zoning administrator adopted a mitigated negative declaration (MND) and approved the project. The zoning administrator’s decision was subsequently affirmed following appeals to the area planning commission and city council.
Following the city council’s approval of the project, three petitioners, including a resident of a nearby building, a former tenant of the apartments, and HERO, filed a petition for writ of mandate challenging the approval. The thrust of the petitioners’ CEQA claims was that the city was required to prepare an EIR to analyze the project’s direct, indirect, and cumulative impacts on the supply of rent-stabilized housing and the displacement of tenants. The trial court denied the petition in full, holding that the city properly concluded the project would have no impact on housing or population because the rental units had been removed from the market and vacated long before the hotel project was proposed. The trial court further ruled that, aside from the baseline issue, the petitioners failed to demonstrate that the project would have a significant effect on the physical environment, and not just socioeconomic impacts.

On appeal, the petitioners’ primary argument was that the city was required to prepare EIR because substantial evidence supported a fair argument that the cumulative effect of the project and other similar projects would be to eliminate rent-stabilized housing units in Hollywood and displace residents that depend on such housing. The Court of Appeal rejected the petitioners’ argument, holding that the proper baseline against which the project’s impact must be assessed is a vacant building, not a tenant-occupied rental property. As the court explained, at the time the environmental analysis for the project commenced in 2015, the property did not include rent-stabilized apartments. Rather, as noted above, the all units had been withdrawn from the rental market in 2013 and the building sat uninhabited since that time. Because these events occurred prior to the project proposal and initial study, the court explained, they were not attributable to the project. Thus, the city properly determined an EIR was not required to analyze such impacts on housing and population. Moreover, the court added, there was nothing in the record to suggest that the 2015 hotel project was a reasonably foreseeable consequence of the initial condominium project for which the apartments were originally removed from the rental market, and there was no evidence that the city was attempting to chop up or evade CEQA review.

Turning to the issue of cumulative impacts, the court held that the city was not required to prepare an EIR to inquire into the cumulative impact of the project on housing and population. Because there was no substantial evidence of a project-specific potentially significant impact, the court explained, the city properly determined that the effects of the project would not be cumulatively considerable and no further analysis was required.

Remy Moose Manley partner Sabrina Teller and associate Christina Berglund represented the Real Parties in Interest in this matter.

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